USD/CHF rises to test last week's highs near 0.9190

• US dollar gains momentums across the board amid risk aversion and higher US yields.
• Swiss franc retreats versus its European rivals.
• USD/CHF remains in the weekly range, now closer to the upper limit.

The USD/CHF broke above 0.9165/70 and jumped to 0.9186, reaching the highest level in almost a week. The pair remains near the daily high and also close to the 0.9190/0.9200 resistance band. The move higher was triggered by higher US yields. The US 10-year yield climbed to 1.38%, the highest since mid-July.

A break above 0.9200 should strengthen the outlook for the US dollar; while on the downside, the key short-term support is 0.9100, with a close below leaving the pair vulnerable.

Looking at the ECB

“Recent price action suggests that the market has turned slightly more hawkish on the ECB, all to the benefit of the euro. However, we doubt that the ECB will provide any hawkish hints through tapering (front-loading of purchases should remain in place, in our view) or through the inflation forecasts. In turn, the EUR could give up some of its recent gains”, explained analysts at ING.

Regarding Switzerland, at ING, the point out that extremely low inflation expectations and the ECB's very dovish monetary policy should not lead to a tightening of the Swiss National Bank’s monetary policy in the coming years. They expect the key interest rate to remain at -0.75% until at least 2024.  

Technical levels